The foreclosure scenario is now causing many rich families to seek shelter from bankruptcy. Filings of Chapter 11 bankruptcy by the wealthy and rich spiked by 73% in the second quarter in comparison to the same quarter in 2008. These were the findings of National Bankruptcy Research Center in Burlingame, California.

More and more individuals as well as families having a minimum of $1,010,650 as secured debts and $336,900 as unsecured are filing bankruptcy cases connected with business re-organizations. The failing real estate market has prevented them for refinancing or selling off estates when the value of the property becomes less than the loan amount due commented attorney Joseph Baldi who deals with bankruptcy matters.

For both debtors and creditors Chapter 11 is relatively more costly and takes up more time in comparison to Chapter 7 involving liquidation of all assets. The rich have bigger houses, mortgages on more than one car and children studying in private schools explained Leslie Linfield of Institute for Financial Literacy located in Portland, Maine. It is a group engaged in credit counseling and conducting research. She said,